Personal finance clinic: Seven steps for looking after your loved ones
What do you want to achieve? What’s important to you? As a financial adviser, I can tell you that almost all my clients are driven by a desire to protect the ones they love and to make sure they are looked after financially.
Today, I am sharing seven steps with you to help you achieve this too.
1. Write a Will.
Give your loved ones peace of mind that your assets will go to the right people. There is no such thing as “common law partners” which means a partner might not be entitled to anything of yours, even if you live together, unless you are married or in a civil partnership. Plus, did you know that orphaned children can end up in the care system if you don’t nominate a guardian for them in your Will?
2. Nominate a Power of Attorney.
There are two types of Power of Attorney; one giving power to look after your health and welfare and one giving power to look after your money and finances. It’s worth remembering that spouses do not automatically have the right to do this for you and once you have lost capacity it’s too late to arrange these safeguards. You can now set up Lasting Power of Attorneys online with the Office of the Public Guardian.
3. Insure what you can’t afford to lose.
You are far more likely to be off work for a long time than you are to die before retirement, but most of us only have death in service insurance. Check how long your employer will pay sick pay to you and at what rate? Statutory Sick Pay is only £92.05 a week which certainly doesn’t go very far! Review your insurance arrangements to make sure the bills will still be paid if you couldn’t work anymore.
4. Use trusts.
Most of us arrange life insurance so that the mortgage can be paid off and our funeral costs can be met. If your policy is not held in trust, it can take months, even years, to access this money and it will form part of your estate, potentially creating a tax bill that must be paid before probate is granted and the money is released.
5. Nominate someone to receive your pension.
Many of us have lots of old pensions from previous jobs. Review them and make sure you complete the nomination form so that, on death, the pot you worked so hard for goes to the right person.
6. Inheritance Tax planning.
HMRC collected a record £5bn in Inheritance Tax payments last year, but careful planning can reduce or even eliminate your bill. It’s vital to take stock of your assets and understand the allowances in place, then determine which methods of passing on assets during life or after death best suit you.
7. Talk to your family.
Do your loved ones know where your Will is? Do they know where your accounts and policies are? Have you introduced them to your financial adviser? Few people like discussing death, but having instructions in place will make an already difficult time that little bit less distressing for the people you have always looked after.
Lauren Peters, senior financial adviser at Fiducia Wealth Management, is a chartered financial planner. She also holds the pensions specialist and later life specialist qualifications. You can contact Lauren directly via email@example.com or via 07850 873126.
This article was also recently published in the Moulsham Times.
If you would like to know more about how we as Financial Advisers can help you with your or a loved one’s Long Term Care needs and general latter life planning then visit the Later Life Planning section of our website: Later Life Planning or send us email at: firstname.lastname@example.org
The information contained in website is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occasioned in connection with the content hereof and any such action or inaction. Professional financial advice is necessary for every case.
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